High Court Health Care Ruling Shifts Action To States

Protesters and supporters of President Obama's health care law await the Supreme Court's ruling Thursday. The court ruled to uphold the law. The focus now shifts to the states, which are responsible for the lion's share of getting people without insurance covered.

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Originally published on June 29, 2012 8:27 pm

The Supreme Court's decision to uphold nearly all of the Affordable Care Act may move the debate to the presidential campaign trail. But it shifts much of the burden of implementing the law to the states.

States are actually responsible for the lion's share of getting people without insurance covered under the health law.

First, they get to decide whether or not to set up and run a marketplace called a health insurance exchange. That's where individuals without insurance and small businesses will go to compare plans and buy coverage. The court's action is what many state leaders have been waiting for.

"There are many states that will look at this opinion and realize that if they do not build their own health insurance exchange or take other steps to implement the law, the federal government will come and do it for them," said Alan Weil, executive director of the nonpartisan National Academy for State Health Policy. "And for most states, that's not going to be very palatable."

Weil, who has kept track, says so far only about a dozen states are well into the process of planning their exchanges. States have until mid-November to decide whether to run their own or let the federal government do it for them. Either way, there's a lot of concern about whether the exchanges will be ready when enrollment is supposed to begin a little more than a year from now.

"This is a complex law; the health care system is complex," he said. "The task of finding 35 million people and determining them eligible for a program and giving them options and figuring out the right place for them is not something we are going to get right the first day."

States also now have to make a decision about Medicaid, which comes as something of a surprise.

The law calls for states to extend the program to everyone with incomes under 133 percent of poverty, just under $15,000 a year. It's about 17 million more people.

Almost no one thought the court would respond to the states' argument that the federal government was coercing them into the Medicaid expansion. But that's exactly what the justices did.

Rather than strike down the law's huge expansion of Medicaid, however, the justices simply said the federal government couldn't take away the rest of a state's Medicaid funding if it doesn't agree to add the new people.

"They said that this new group of people exists in their own program, to use the court's words — that they are not, strictly speaking, part of the general Medicaid program, if we can think of it as the general Medicaid program," said Sara Rosenbaum, a Medicaid expert and law professor at the George Washington University. "They're their own special program."

Rosenbaum says she doubts very many states will end up declining to take part in the expansion.

For one thing, unlike the rest of Medicaid, where the funding is shared, in this case the federal government is paying almost the whole bill.

"It's free, like they say in the ad," she said. "Free money to cover the very poorest Americans, most of whom are working adults — that's why they weren't eligible before."

But there's another reason states may feel the need to participate. It turns out that many of those low-income people who aren't currently eligible for Medicaid won't be eligible to participate in the health insurance exchanges and get federal subsidies, either.

So if a state doesn't expand Medicaid, she says, those people will be left high and dry — and with their state's leaders to thank.

"I think almost no state in January 2014 wants to be in the position of having to explain to the rest of the country why its poorest citizens can't get any coverage," Rosenbaum said.

Still, the decision won't be an easy one for many of the governors who fought the law. Expanding Medicaid is unpopular in many states, particularly when it's seen as taking money away from programs like transportation or education.

But even Paul Clement, who argued the case on behalf of the 26 states that fought the Medicaid expansion, says he thinks most states will end up going along with the Medicaid expansion.

"Since there's all that new money sitting there and it's all going to be paid for by federal tax dollars whether or not they accept it, it's going to be very hard for states to refuse the funds," he told NPR's Nina Totenberg in an interview.

At least the Supreme Court says states will legally now have that option.

Copyright 2013 NPR. To see more, visit http://www.npr.org/.

Transcript

LINDA WERTHEIMER, HOST:

This is MORNING EDITION, from NPR News. I'm Linda Wertheimer.

RENEE MONTAGNE, HOST:

And I'm Renee Montagne. The Supreme Court's decision to uphold nearly all of the Affordable Care Act shifts the continuing debate over the law to the presidential campaign. And it shifts much of the burden of implementing the law to the states.

As NPR's Julie Rovner reports, the clock is now ticking.

JULIE ROVNER, BYLINE: States are actually responsible for the lion's share of getting people without insurance covered under the new law. First, they get to decide whether or not to set up, and run, a marketplace called a health insurance exchange. That's where individuals without insurance, and small businesses, will go to compare plans and buy coverage. Alan Weil heads the nonpartisan National Academy for State Health Policy. He says yesterday's action will likely prompt a number of states who've been waiting for the court to rule, to get moving.

ALAN WEIL: There are many states that will look at this opinion and realize that if they do not build their own health insurance exchange, or take other steps to implement the law, the federal government will come in and do it for them. And for most states, that's not going to be very palatable.

ROVNER: So far, only about a dozen states are well into the process of planning their exchanges. Weil says states have until this November to decide whether to run their own, or let the federal government do it for them. Either way, he says, there's a lot of concern about whether the exchanges will be ready when enrollment is supposed to begin a little more than a year from now.

WEIL: This is a complex law. The health-care system is complex. The task of finding 35 million people, and determining them eligible for a program, and giving them options, and figuring out the right place for them, is not something we are going to get right the first day.

ROVNER: Then there's Medicaid. The law calls for states to extend the program to everyone with incomes under 133 percent of poverty - about $15,000 a year. That's about 17 million more people. Almost no one thought the court would respond to the states' arguments that the federal government was coercing them into the Medicaid expansion. But that's exactly what the justices did.

Rather than strike down the law's huge expansion of Medicaid, however, the justices simply said that the federal government couldn't take away the rest of a state's Medicaid funding if it doesn't agree to add the new people. Sara Rosenbaum, a Medicaid expert and law professor at George Washington University, says she doubts very many states will end up declining to take part in the expansion. For one thing, unlike the rest of Medicaid - where the funding is shared - in this case, the federal government is paying almost the whole bill.

SARA ROSENBAUM: Free money. It's free money to cover the very poorest Americans, most of whom are working adults. That's why they weren't eligible before.

ROVNER: But there's another reason states may feel the need to participate. It turns out that many of those low-income people who aren't currently eligible for Medicaid, won't be eligible to participate in the health insurance exchanges and get federal subsidies, either.

ROSENBAUM: That in order to go into the exchange, your income has to reach a certain threshold. You have to, essentially, be poor, but not as poor. The Medicaid program is where we're going to subsidize care for the poorest people.

ROVNER: So if a state doesn't expand Medicaid, she says, those people will be left high and dry, and with their state's leaders to thank.

ROSENBAUM: I think almost no state in January 2014 wants to be in the position of having to explain to the rest of the country why its poorest citizens can't get any coverage.

ROVNER: But expanding Medicaid is unpopular in many states, particularly when it's seen as taking money away from programs like transportation or education. Still, even Paul Clement, who argued the case on behalf of the 26 states who fought the Medicaid expansion, says he thinks most states will end up going along with the Medicaid expansion.

PAUL CLEMENT: Since there's all that new money sitting there, and it's all going to be paid for by federal tax dollars whether or not the states accept it, it's still going to be very hard, I think, for the states to refuse the funds.

ROVNER: But the Supreme Court says the states will legally now have the option.